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As Congress Talks Stimulus, Labor Leaders Worry They Won't Have a Voice

Labor leaders say senators are paying too much attention to
Labor leaders say senators are paying too much attention to "Wall Street Democrats" such as Lawrence Summers, left, and Robert Rubin. (Bill O'leary - Twp)
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By Jeffrey H. Birnbaum
Tuesday, January 22, 2008

Organized labor, a fundamental constituency of the Democratic Party, is unhappy about lots of things these days, even though Democrats are in the majority in Congress.

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Its latest disappointment involves the economic stimulus package that soon will start moving on Capitol Hill. Some union leaders are worried that they are not being heard, particularly in the Senate, and that a group of Wall Street Democrats led by former Treasury secretary Robert Rubin is getting more attention.

Case in point, labor leaders say, are the two initial hearings by the Senate Finance Committee on the stimulus bill. One will feature Jason Furman, director of the Brookings Institution's Hamilton Project, a group heavy with Wall Street backers such as Rubin. The other will feature Peter R. Orszag, the head of the Congressional Budget Office, who is a former director of the Hamilton Project.

"The Finance Committee is a bit more of a challenge for labor and progressives," said Bill Samuel, legislative director of the AFL-CIO. Richard L. Trumka, AFL-CIO secretary-treasurer, said the labor federation is "working on" the finance panel's chairman, Sen. Max Baucus (D-Mont.), to persuade him to include labor's voice in later sessions.

But Leo W. Gerard, president of United Steelworkers International, said organized labor's concerns go well beyond a couple of hearings. "We have a problem in the Democratic Party," he said. "There's way too much influence from K Street lobbyists and Rubinistas" -- his term for Wall Street Democrats.

"These aren't the guys you ought to be listening to. These are the guys who brought the economic insanity we're dealing with now," Gerard said. "This is the same crowd that helped engineer the credit crunch and the collapse of mortgages."

On substance, labor economists such as those at the left-leaning Economic Policy Institute like the idea of pouring money into infrastructure, such as road and bridge construction, as a way to create jobs and spur growth. Hamilton Project economists disagree, asserting that kind of spending takes too long to help the economy.

On broader issues, Hamilton Project folks prefer free trade and abhor budget deficits; labor economists tend to think the opposite way.

"On a lot of issues, they are definitely at odds," said Dean Baker, co-director of the Center for Economic and Policy Research. At the moment among Democrats, he added, "the Hamilton people have the upper hand."

Labor officials are boiling over the prominence given by Democrats to Rubin and his successor at Treasury, Lawrence H. Summers. "If the agenda that Max [Baucus] pushes forward represents the interest of the Hamilton Project, it will be a terrible disservice to the middle class," Gerard said.

But at least labor might get its say in the Senate. A day after The Post asked the Finance Committee about labor's complaints, the AFL-CIO's Samuel e-mailed to say that the committee had agreed to invite a labor person to testify -- eventually.

Another Union Complaint . . .

Democrats are holding their presidential nominating convention in Denver this summer. You would think, then, that there would be plenty of unionized hotels there to accommodate the delegates and please the party's union friends.


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